Greek minister says believes he can count on ECB

FRANKFURT (Reuters) - Greece can conclude debt talks with its international lenders in a short period and believes it can count on the support of the European Central Bank, Finance Minister Yanis Varoufakis said after talks at ECB headquarters on Wednesday.

With a new leftist government promising to end five years of austerity, Varoufakis is meeting senior officials across Europe as part of a drive to build support for a new agreement on Greece’s debt.

After meeting ECB President Mario Draghi in Frankfurt, Varoufakis told Reuters: “The ECB is the central bank of Greece ... The ECB will do whatever it takes to support the member states in the euro zone.”

“I have no doubt that we can conclude our discussions with our European partners, as well as with the IMF and the ECB, in a very short space of time so that we can kick-start the Greek economy,” he added.

Without the support of international lenders, Greece would soon find itself back in an acute financial crisis. Its banks have been bleeding deposits and two have begun to tap emergency central bank liquidity as money flees abroad, banking sources say.

Unable to tap the markets because of sky-high borrowing costs, the government has enough cash to meet its funding needs for the next couple of months. But it faces around 10 billion euros (8 billion pounds) of debt repayments over the summer.

“We had a very fruitful exchange,” Varoufakis said after meeting Draghi. “We established a line of communication. We outlined to him the main objectives of this government which is to reform Greece in a way that has never been tried before and with a determination that was always absent.”

“We also stated categorically that the debt-deflationary cycle in which Greece finds itself is detrimental to all efforts to reform Greece,” Varoufakis added. “He was good enough to explain to us his own constraints.”

The ECB did not comment on the talks. The bank’s policy-making governing council was due to meet later on Wednesday to discuss whether to continue liquidity support to Greek banks, on what conditions and for how long.

A source familiar with the Greek position said: “We are thinking of a bridging programme. You may not call it a ‘programme’ for political reasons but perhaps a contract.”

Greek government officials discussed this idea with Draghi at their meeting, the source said. So long as Greece remains in some form of programme with its lenders, it is easier for it to qualify for ECB funding - chiefly to banks.

ECB officials present at Wednesday’s meeting talked about the rules on such funding and their desire that the Greeks reach an interim arrangement with the Eurogroup of euro zone finance ministers, the source familiar with the Greek position said.

Reporting by John O'Donnell; Writing by Paul Carrel; Editing by Alison Williams and Paul Taylor